Client financial education has been one of the biggest problems in the UK for a number of years and research shows that it also an issue in Asia.
Quilter International surveyed 107 high net worth (HNW) individuals across Hong Kong and Singapore and found 47% believe their greatest concern is a lack of financial knowledge about managing their wealth.
Despite this, 53% across both regions want to be actively involved in managing their wealth, meaning that they are part of the decision-making process and are informed about why actions are being taken.
This highlights an opportunity for wealth managers and financial advisers to educate and empower HNWs so that they can make better informed decisions about their wealth.
Succession planning
Education is an important area in the advice sector especially as the greatest wealth transfer is currently underway and next gen clients need to be informed about their incoming financial affairs.
Only 30% say they have had discussions which explain why wealth transfers and inheritance plans are important to them and their family.
For beneficiaries, this drops to just 16% showing that there is a need for professional advice.
At present, 54% of HNW donors expect the wealth management industry to better educate them on how different wealth solutions and structures can best support the overall wealth transfer process.
‘Prone to inaction’
Ian Kloss, Quilter International Singapore chief executive, said: “The results of our research highlight that there is a big opportunity for wealth managers and financial advisers to help educate HNW individuals and demonstrate their competence and technical knowledge in their wealth and succession planning by taking a proactive role.
“HNW individuals are understandably interested in being a part of the wealth management decision-making process but are also keen to seek professional advice to help guide their decisions and currently feel they lack access to it.
“One of the problems our research has exposed is that, while wealth transfer conversations are happening typically within families, these conversations are failing to reveal how critical it is to get a wealth transfer plan in place.
“Traditionally, these conversations could be a challenge within most parts of Asia. A mix of perceptions and cultural factors has stifled open discussion between generations.
“Without a good level of financial and technical knowledge or an understanding of why wealth transfer plans are important, HNW individuals may be prone to inaction or making the wrong decisions. We believe wealth managers and financial advisers can play a critical role in introducing the topic, exposing its significance and getting families aligned.”
